The EU is becoming less economically important by the hour

Right the first time, Prime Minister: India, not Europe, is where the growth is

Measure it how you will, the UK is now selling less to the EU than to the rest of the world. On the raw data, sales to the EU now accountfor 49.6 per cent of our total exports: the first time this has happened since our trade was artificially redirected by the phased imposition of the Common External Tariff in the mid-1970s. The true figure is considerably lower, because of what economists call the Rotterdam Effect: many British exports to non-EU markets are shipped through Antwerp and Rotterdam, thus showing up in the figures as exports to the EU.

Never mind the odd percentage point here or there, though. The trend is overwhelming. In May, the last month for which full statistics are available, our exports to the EU fell by five per cent on the previous year, while our exports to the rest of the world rose by seven per cent. Over the next five years, while Europe declines, our sales to Asia are set to increase by 30 per cent, to Latin America by 40 per cent and to Africa by 60 per cent.

Last month, the GDP of the Commonwealth overtook that of the eurozone. The English-speaking markets which Heath and Wilson wrote off in the early 1970s have solidly outperformed those in the EU, and are predicted to grow by 7.3 per cent a year over the next five years.

Remember that, while overseas trade matters more to Britain than to most countries, our businesses deal largely in the domestic market. Most, indeed, trade only within a ten-mile radius. Some 15 per cent of our economy depends on sales to the EU, a further 15 per cent on sales to the rest of the world, and 70 per cent on the home market. Yet, for the sake of having a minority say in the rules of the EU, which accounts for 15 per cent of our economy, we apply the full burden of Brussels regulations to 100 per cent of our businesses. No wonder the Swiss prefer a free trade agreement : while they sell, proportionately, far more to the EU than we do, they recognise that remaining outside the Brussels regulatory framework gives them a competitive advantage.

No other member of the EU conducts such a high proportion of its trade with other continents. I can see why Belgium, 82 per cent of whose exports go to the EU, wants a voice in how the rules of the single market are set. For Britain, though, the EU will soon be just one more market alongside NAFTA, ASEAN and the rest. Our place at the European table will be no more valuable than our place at the Pacific table. Why, then, should we be prepared to pay such a high price, politically and economically, to keep it?

The Common External Tariff is now, on average, between five and nine per cent. This means that Britain is obliged to impose a higher tariff against most non-EU goods than it did in the early twentieth century. For a global nation like ours, this makes no sense. The whole point of a market, after all, is to swap on the back of differences. Yet we have prejudiced our natural trade patterns – particularly with producers of food and raw commodities in the Commonwealth and the developing world – in order to participate in a customs union with a series of similar industrialised economies.

All in all, this seems a strange moment for the PM to opine that the EU is uniquely important to our economic success. 'Britain’s interest – trading a vast share of our GDP – is to be in those markets', he says. 'Not just buying, selling, investing, receiving investment but also helping to write the rules. If we were outside, we wouldn’t be able to do that.' Well, yes. Just as, being outside Mercosur, we have no say over how those markets are regulated; but that hasn't stopped our sales to South America surging while our sales to Europe plummet. The truth is that countries don't trade with countries; businesses trade with businesses.

Look one more time at these graphs. Forty years ago, our fathers made the calculation that Western Europe was expanding, and that we ought to be part of that expansion. In reality, Europe has contracted, and we've been squeezed with it. It's time to burst free.